Young Partners: Stop Being Passive and Build a Better Firm

Source: Public Practice

In this article, consultant Bill Reeb addresses the concerns of many young partners, who feel that (1) senior partners are “milking the firm as a cash cow, not investing in the future, and trying to elicit a premium buyout price,” and (2) they have little leverage to do anything about it.

These feelings, Reeb says, are usually caused by anxiety rather than by reality. Noting that “there is no greater asset to a firm than its young leaders,” Reeb says that young partners have plenty of leverage. But, he continues, “There is a difference between leverage and stupidity. Just because you have leverage, it doesn't mean you want to slap someone across the face in public with it.”

Rather, young partners should engage in a dialog with senior partners. They need to recognize that, like the senior partners, they must also be willing to invest in the firm's future and shouldn't be trying to negotiate the lowest possible buyout with partners approaching retirement. In Reeb's experience, when younger partners and senior partners discuss “how to invest in the firm so that succession, firm continuation, and value are enhanced, synergy is created.” If younger partners can't make this happen at their firms, it may be time for a change.

For the complete article, read “Merger (Column 3) – A Difference in Perspectives.”

From Public Practice, Texas Society of CPAs, August 2011, www.tscpa.org.